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Are You Really Eligible For The Earned Income Tax Credit?

The Earned Income Tax Credit is available to American families within certain income brackets. Tax credits can range from $475 to $5,891 depending upon how many children you have and what your income level is . Here is a look at the strict eligibility requirements for the credit so you can determine if you qualify.

Family Size The amount of your earned income credit (EIC) is dependent upon how big your family is. For married couples with no eligible children, the tax credit is $475. Families with one eligible child can receive a tax credit of $3,169. Families with two eligible children can receive a tax credit of $5,236. Meanwhile, families with three or more eligible children can receive a tax credit of $5,891. There is no larger tax credit for families with more than three children.

Income Limits Family eligibility is determined by a set of strict income limitations. To be eligible to receive the Earned Income Tax Credit with no children, your annual income cannot exceed $13,980 if filing a single return or $19,190 if married filing jointly. If you have one child, your annual income cannot be more than $36,920, or $42,130 if married filing jointly. For families with two children, your income cannot surpass $41,952, or $47,162 if you are filing jointly. Finally, if you have three or more qualifying children, your annual income cannot exceed $45,060, or $50,270 if married filing jointly. Income limits are subject to change from year to year, so it is vital that you check the IRS guidelines every year to see if you are still eligible for this tax credit.

Special Rules for Married Couples The only way that a married couple will be eligible for the Earned Income Tax Credit is to file jointly. If they file separately, they will be immediately disqualified from receiving the tax credit. Similarly, many other tax credits are only available to married couples filing jointly. While filing separately can have its advantages, when it comes to the Earned Income Tax Credit, filing jointly is the way to get your tax bill reduced significantly.

The Bottom Line The Earned Income Tax Credit is a highly attractive tax credit that many American families take advantage of year after year. Eligibility requirements and income maximums can change from year to year, so it is wise to check the IRS guidelines prior to filing your taxes so that you will not be caught off guard. There are no exceptions when it comes to the Earned Income Tax Credit. The guidelines are stringent, and either you are eligible or you aren't. Do not try to file for this tax credit if you are not eligible. Doing so will likely result in an inquiry or audit from the Internal Revenue Service .